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2013 DIGILAW 276 (CHH)

Shantilal Parakh v. State of C. G.

2013-09-17

MANINDRA MOHAN SHRIVASTAVA

body2013
ORDER Manindra Mohan Shrivastava, J. 1. This writ petition under Article 226/227 of the Constitution of India has been filed by the petitioner being aggrieved by the action of the respondents in allowing application of respondent No. 4 for grant of mining lease for winning lime stone. Reliefs, which have been claimed by the petitioner, contained in para, 7 of the writ petition, are as under:- 7. (i) Before the relief (A) following relief be added:- (i) A writ and or an order in the nature of writ of prohibition be issued restraining the respondent No. 3 from entering into any agreement with the respondent No. 4 as per their communication no. 1-3-14/02/Khanij Dtd. 14-01-2013 (Annexure P-6) as the same is mala-fide, illegal and against the relevant provisions of law. (A) A writ of and/or in the nature of Mandamus do issue commanding and directing; the Respondent Nos. 1 to 3, their servants, agents and employees, not to give any and/or further effect to the impugned memo Annexure P-1 and/or to forbear from granting any mining lease to the Respondent No. 4 for the said mines pursuant to the impugned memo Annexure P-1. A. (1) A writ and/or an order in the nature of appropriate writ do issue cancelling/quashing the lease deed dated 31.01.2003 executed during the pendency of matter as Annexure R4-1 by giving effect to Annexure P-1 since the same is in utter violation of the petitioner's preferential rights and in violation of 1957 Act, the Rules made thereunder including the rules of natural justice. B. A writ of and/or in the nature of Mandamus do issue commanding the Respondent Nos. 1 to 3, their servants, agents and employees to grant Mining lease to the petitioner for the said mines on the basis of his preferential claim founded on S. 11(2) of the 1957 Act. C. A writ of and/or in the nature of Certiorari do issue commanding and directing the Respondent State authorities to produce before the Hon'ble Court at the hearing of this writ petition, all the relevant files, records, registers, papers, correspondence etc. pertaining to the applications submitted for mining lease both by the petitioner and the Respondent No. 4 for the said mines so that conscionable justice may be done by quashing the impugned memo Annexure P-1. pertaining to the applications submitted for mining lease both by the petitioner and the Respondent No. 4 for the said mines so that conscionable justice may be done by quashing the impugned memo Annexure P-1. D. Any other appropriate writ, order or direction do issue as may appear to the Hon'ble Court just fit and proper in the peculiar factual matrix of the present case. E. To award exemplary costs to the petitioner against all the respondents. The factual matrix of the case, relevant for decision making are stated infra. 2. The petitioner desirous of obtaining mining lease in respect of an area comprised of Khasra No. 623/2.00 Hectare situated at Village Takraguda, Taluka Jagdalpur, District Bastar applied to the State Government vide his application dated 11-06-2001. After submission of the application, the petitioner also obtained clearance/no objection from different authorities. While the matter stood thus, the respondent No. 4 also moved an application for grant of mining lease in respect of the same area, as applied by the petitioner, on 04-06-2002. The application of respondent No. 4 was considered and the State Government vide letter dated 07-11-2002 (Annexure P-1) communicated to respondent No. 4 that his application submitted on 04-06-2002 in respect of the area described above has been accepted and the State Government has decided to grant mining lease in his favour. Respondent No. 4 was directed to comply with requirements of deposits and submission of mining plan approved by the Indian Bureau of Mines. Aggrieved by aforesaid letter communicating acceptance of application of respondent No. 4, the petitioner has filed this writ petition. 3. Contention of learned counsel for the petitioner is two fold. Firstly, the action of the respondents in accepting application of respondent No. 4 is challenged on the ground that such action impliedly rejects application of the petitioner for grant of mining lease in respect of the same area in utter violation of the mandatory provisions contained in Rule 26 of the Mineral Concession Rules, 1960(In short "the Rules of 1960"). It has been urged by learned counsel for the petitioner that inviolable rule of affording an opportunity of hearing and recording reasons for rejection has been given a complete go by. It has been urged by learned counsel for the petitioner that inviolable rule of affording an opportunity of hearing and recording reasons for rejection has been given a complete go by. It has been further contended that in the present case, the authority has proceeded to pass an order in favour of respondent No. 4 completely ignoring petitioner's right of being considered and the implied rejection of the petitioner's application suffers from arbitrariness. Other submission is that the area applied for was not notified one and therefore, per force, provision of Sub Section 2 of Section 11 of the Mines and Minerals (Development and Regulation) Act, 1957 (In short "the Act of 1957"), the petitioner, having applied for grant of lease at an earlier point of time, was entitled to preferential treatment. It is further submitted that the respondents having not recorded any reason as required under sub section (5) of Section 11 of the Act of 1957 to justify departure from normal rule of preferential treatment, action of the respondents is in clear breach of statutory mandate of sub section (2) of Section 11 of the Act of 1957. 4. Per contra, learned State counsel submitted that the petitioner cannot claim any indefeasible right to get lease of the area applied for. The State Government, as the competent authority, has discretion, to be exercised on consideration of relevant circumstances, to grant or refuse to grant mining lease. Referring to specific averments made in the return, it has been submitted that the State Government, upon consideration of petitioner's application and that of respondent No. 4, found that no preferential treatment could be given to the petitioner for the reason that a lease was already in operation in favour of the son of the petitioner and further, son of the petitioner had already applied for grant of mining lease over two other areas. He further submits that the Collector also reported to the State Government that there was no lease subsisting in favour of respondent No. 4. Therefore, considering all these circumstances, the State Government in exercise of its discretion vested in it under sub section 5 of Section 11 of the Act of 1957 decided to depart from the normal rule of preferential treatment by granting application of respondent No. 4. Therefore, considering all these circumstances, the State Government in exercise of its discretion vested in it under sub section 5 of Section 11 of the Act of 1957 decided to depart from the normal rule of preferential treatment by granting application of respondent No. 4. In so far as opportunity of hearing is concerned, learned State counsel submits that the reasons, which have been stated to justify departure from normal rule of preferential treatment, are so overwhelming that even if opportunity would have been granted, result would have been no different. Therefore, only on the ground of violation of principles of natural justice, the petitioner is not entitled to any relief. 5. Learned counsel for respondent No. 4 raised manifold contentions. It has been argued that there is no specific prayer seeking quashment of communication (Annexure P-1). He submits that mere prayer for issuance of writ of mandamus to restrain the State authorities from acting pursuant to that communication is not enough and in the absence of any prayer for quashing communication (Annexure P-1), this writ petition is liable to be dismissed. Next contention is that there exists an alternative and statutory remedy of revision under Section 30 of the Act of 1957 before the Central Government. This alternative remedy was not availed by the petitioner and he straightway rushed to this Court by filing this writ petition. Despite pendency of the matter for several years, the writ petition is liable to be dismissed, as the alternative and statutory remedy is still available to the petitioner under the law. The petitioner having filed this petition, ignorant of law with regard to existence of alternative remedy, cannot derive any benefit of his own ignorance, so as to prejudice other parties. It is then contended that judicial pronouncements in the cases of Indian Metals and Ferro Alloys Ltd. Vs. Union of India and others 1992 Supp. (1) SCC 91, Dharambir Singh Vs. Union of India and others (1996) 6 SCC 702 , M/s. Indian Charge Chrome Ltd. and another Vs. Union of India and others AIR 2002 Orissa 45, has settled legal position that filing of application for grant of lease at an earlier point of time does not confer any absolute right on such application and the State's discretion on relevant considerations to giant lease to one, who has applied later on, cannot be questioned only on that ground. Union of India and others AIR 2002 Orissa 45, has settled legal position that filing of application for grant of lease at an earlier point of time does not confer any absolute right on such application and the State's discretion on relevant considerations to giant lease to one, who has applied later on, cannot be questioned only on that ground. Lastly, it is submitted that the provision contained-in Rule 26 of the Rules of 1960, on a fair reading, cannot be said to mean that grant of opportunity of hearing is mandatory. According to learned counsel for respondent No. 4, the use of the word "may" is clearly indicative of the intention of the rule making authority that it is not necessary to afford an opportunity of hearing invariably in all cases and it is the discretion of the authority to afford opportunity of hearing or not. In any case, for the reasons stated by the government in their return, there is no arbitrariness, favourism or nepotism practiced so as to call for an interference with grant of mining lease in favour of respondent No. 4. 6. The objection with regard to maintainability of the petition on the ground that in the absence of prayer for quashing of communication (Annexure P-1), the writ petition must fall to the ground, is merely a plea of technical nature, Which does not affect the maintainability of the petition. At the time when the writ petition was filed, cause of action of the petitioner was the decision taken by the government to grant lease in favour of respondent No. 4, which was' communicated to respondent No. 4 vide letter Annexure P-1. Prayer contained in Clause 7(A) is issuance of writ in the nature of mandamus not to give effect to memo Annexure P-1 coupled with the prayer to command respondents No. 1 to 3 to forbear from granting mining lease to respondent No. 4. In the opinion of this Court, the said prayer for issuance of writ of mandamus to restrain the State to grant lease in furtherance of decision communicated vide Annexure P-1 is sufficient to maintain the writ petition. It is not a case where the State Government communicated the petitioner any order passed by it rejecting petitioner's application and the petitioner despite having knowledge and possession of the order, failed to seek quashing of the same. It is not a case where the State Government communicated the petitioner any order passed by it rejecting petitioner's application and the petitioner despite having knowledge and possession of the order, failed to seek quashing of the same. The petitioner, in fact, sought issuance of writ of mandamus to respondents No. 1 to 3 not to give effect to communication made to respondent No. 4 stating that his application for grant of lease has been allowed. Moreover, later on, in view of subsequent developments, the petitioner has prayed for specific writs to restrain respondents from entering into agreement followed by another prayer to cancel/quash lease granted in favour of respondent No. 4 during the pendency of petition. Therefore, objection in that regard is overruled. 7. In so far as objection with regard to maintainability of the petition on the ground of existence of alternative remedy is concerned, it is too well settled legal proposition that the jurisdiction of the High Court under Article 226 is extra-ordinary in nature and there is no rule of thumb that in all eases, where there exists an alternative remedy, the writ jurisdiction would necessarily be ousted. It is merely a rule of self-restraint judicially evolved by the writ Courts and imposed upon itself, not to exercise discretion in favour of a petitioner, who otherwise has alternative and efficacious remedy available under the law for redressal of his grievance. In plethora of decisions, the Supreme Court and High Courts have, however, laid down broad principles to govern discretion in such cases. In the case of Whirlpool. Corporation Vs. Registrar of Trade Marks, Mumbai and Others (1998)8 SCC 1 , Harbanslal Sahnia and Another Vs. Indian Oil Corporation Limited and Others (2003) 2 SCC 107 , the Supreme Court has reiterated well settled legal principles that in cases, where the action is challenged on the grounds of absence of jurisdiction or violation of principles of natural justice or malafide or in any case where writ is sought for enforcement of fundamental right, the Court may not insist on exhaustion of alternative remedy. However, those considerations are not exhaustive and in appropriate cases, other circumstances may also justify exercise of discretion notwithstanding existence of alternative remedy. 8. However, those considerations are not exhaustive and in appropriate cases, other circumstances may also justify exercise of discretion notwithstanding existence of alternative remedy. 8. In the present case, there are two exceptional features why I am not inclined to throw the petition only on the ground of existence of alternative remedy This writ petition was filed by the petitioner wayback in the year 2002. This Court entertained petition and issued notices. Reply has been filed by the respondents. This petition has remained pending for more than 11 years. Now, at this stage, it would be rather unjust to again relegate the petitioner to avail alternative remedy of revision before the State Government. The other reason is that for deciding the issue raised in this petition, there is no requirement to record any finding on any disputed question of fact. In fact, the relevant facts necessary for decision on the issues arising in the writ petition are admitted. Lastly, the petitioner has challenged the action of the respondents in granting lease to respondent No. 4 impliedly rejecting petitioner's application on the ground of violation of statutory provision which enjoins upon the authority a duty and corresponding right upon the petitioner of being afforded one opportunity of hearing before rejecting petitioner's application. The aforesaid exceptional features of the case, on due consideration, are sufficient to reject the plea of the alternative remedy at this stage. Moreover, one of grounds to assail the legality of the action is that principles of natural justice embodied in the provisions contained in Rule 26 of the Rules of 1960 have been violated. Therefore, I am not inclined to dismiss the petition on the ground of existence of alternative remedy. 9. The procedure for obtaining lease in respect of the land, in which, the minerals vest in the government has been laid down under Section 10, 11 & 12 along with other ancillary provisions of the Act of 1957. The substantive provision contained in Section 11 of the Act of 1957 provides for preferential right of certain persons in the matter of grant of prospecting license of mining lease. Sub-section (2) thereof lay down provision in respect of cases where the area proposed has been notified in the official gazette as well as the cases where area is not notified for grant of lease. Sub-section (2) thereof lay down provision in respect of cases where the area proposed has been notified in the official gazette as well as the cases where area is not notified for grant of lease. In cases, where the State Government has not notified in the official gazette the area for grant of mining lease and two or more persons apply for grant of mining lease in respect of any land in such area, the applicant, whose application was received earlier, has a preferential right to be considered for grant of mining lease over the applicant, whose application was received later. However, in a case, where the area has been notified in the official gazette, all applications received during the period specified in the notification and applications received even prior to publication of notification and not disposed off shall be deemed to have been received on the same date for the purpose of assigning propriety under that sub section. Therefore, the statutory scheme of granting preferential treatment to the applicant, whose application for grant of mining lease is moved in the earlier point of time in respect of any land in that area, in respect of which, no notification in the official gazette has been issued has to be given effect to. The aforesaid rule is however, subject to the provisions contained in sub-section (1) of Section 11 as is clear from opening words of sub-section (2). Moreover, as an exception to the general rule that one who applies at an earlier point of time, would be given preferential treatment, has been provided by overriding provision contained in sub-section (5) that the State Government may, for any special reasons to be recorded, grant mining lease to the applicant, whose application was received later in preference to applicant, whose application was received earlier. Further, proviso appended thereto provides that in respect of minerals specified in the first schedule, prior approval of the Central Government shall be obtained before passing any order under sub-section (5). It is worth noting that provision contained in sub-section (5) has overriding effect over provision contained in sub-section (2), it is subject to provisions contained in sub-section (1). Further, proviso appended thereto provides that in respect of minerals specified in the first schedule, prior approval of the Central Government shall be obtained before passing any order under sub-section (5). It is worth noting that provision contained in sub-section (5) has overriding effect over provision contained in sub-section (2), it is subject to provisions contained in sub-section (1). Statutory scheme of the aforesaid provision is thus crystal clear that subject to the provisions contained in sub-section (1), in cases where area has not been notified in official gazette, application given at an earlier point of time, would be given preferential treatment though at the same time, the State has discretion subject to the provisions of sub-section (1) to grant lease to applicant, who has applied at a later point of time. However, the exercise of discretion to depart from the normal rule of preferential treatment is neither unbridled nor uncanalised. A statutory rider exists in the form of obligation cast on the authority to show any special reasons with a further duty to record special reasons. The exercise of statutory power to depart from normal rule of preferential treatment is pre-conditioned by requirement of recording special reasons. The legislature intention is not to allow authority to depart from the normal rule of preferential treatment on its own whims and fancies. The precondition of special reason to be recorded further assumes mandatory character because such a provision is intended to ensure that normal rule of preferential treatment is departed only in deserving cases and at the same time existence of reasons on records and files as to why such a departure was made. 10. It is an admitted position on record in the present case that the application for grant of mining lease was submitted by the petitioner much prior in point of time as compared to respondent No. 4. The petitioner submitted his application on 11-06-2001 whereas respondent No. 4 had submitted his application as late as on 04-06-2002, after almost one year. Moreover, it is not in dispute that the land, in respect of which, lease was applied for, was situated in the area, which has not been notified in the official gazette in terms of provisions contained in sub section (2) of Section 11 of the Act of 1957. Therefore, the rule of preferential treatment favoured the petitioner. 11. Moreover, it is not in dispute that the land, in respect of which, lease was applied for, was situated in the area, which has not been notified in the official gazette in terms of provisions contained in sub section (2) of Section 11 of the Act of 1957. Therefore, the rule of preferential treatment favoured the petitioner. 11. In the present case, the respondent has not come out with any orders or any note sheets or files to demonstrate that for certain reasons, application of the petitioner was rejected followed by the decision to grant mining lease in favour of the respondent No. 4. In the return also, reply in this regard is quite vague and all that can be disclosed is that on application submitted by respondent No. 4, recommendation was made by the Collector on 19-06-2002 (Annexure P-5). The respondents have placed on record a memo dated 05-04-2002 (Annexure R-1), by which, the Collector had already recommended grant of lease in favour of the petitioner. Government memo dated 03-10-2003 (Annexure R-3) shows that a query was made from the Collector regarding the area, in respect of which, lease is granted in favour of the petitioner and his family in Bastar District. In response, Collector vide memo dated 11-10-2002 (Annexure R-4) informed regarding existence of lease in favour of the petitioner's son and pending applications. Though, it has been stated in the reply of the State that considering the information given by the Collector vide Annexure 11-10-2002, the respondents decided to grant lease in favour of respondent No. 4, but no record was produced before the Court to show that the State decided to grant lease, in departure from the normal rule to grant preferential treatment for any special reasons recorded. In fact, there is no order as such rejecting of petitioner's application for grant of lease. The communication has been made to respondent No. 4 stating that his application has been accepted but it does not refer to the application of the petitioner. In fact, there is no order as such rejecting of petitioner's application for grant of lease. The communication has been made to respondent No. 4 stating that his application has been accepted but it does not refer to the application of the petitioner. It is, therefore, apparent that even though, various informations were placed before the State Government by the Collector both in respect of the petitioner and the respondent No. 4 and the petitioner, the authority did not apply its mind much less recorded any special reasons to justify departure from the normal rule of preferential treatment to the applicant, who had applied in earlier point of time. It is apparent that the State in its return has stated various reasons to support the action under challenge. 12. Exercise of power to grant mining lease or to reject applications for grant of mining lease to grant preferential treatment or decision to depart from the normal rule of preferential treatment are statutory in nature. The power being statutory, exercise of the same is also regulated by statutory provision. The fetter imposed on exercise of discretion to depart from normal rule of preferential treatment is embodied in the form of obligation to record special reasons. Therefore, legal requirement is that in case of departure from normal rule, special reasons are required to be recorded. The provision on its logical interpretation would mean that the reasons are required to be recorded in writing and must be reflected from the records containing decision to depart from the normal rule of preferential treatment or it should be reflected from the order passed by the authorities rejecting application of one, who has applied in earlier point of time allowing application of one, who applied later on. In the present case, none of such records or orders have been placed before this Court by the respondents/State. 13. In the case of Mohinder Singh Gill and another Vs. The Chief Election Commissioner, New Delhi and others AIR 1978 SC 851 , the Supreme Court held that exercise of statutory power could be justified only on the basis of reasons recorded in the order and not on the basis of any other reasons which could be supplied to justify the action, in following words:- 8. The Chief Election Commissioner, New Delhi and others AIR 1978 SC 851 , the Supreme Court held that exercise of statutory power could be justified only on the basis of reasons recorded in the order and not on the basis of any other reasons which could be supplied to justify the action, in following words:- 8. "The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji: Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. ---xxx--- 14. All said and done in the return, there is no whisper reflected from the records of the respondents that the authority recorded certain reasons special in nature to justify departure from normal rule of preferential treatment. Argument of learned State counsel is that such reason is, obvious cannot be accepted because if such argument is accepted, provisions contained in the statute requiring special reasons to be recorded would be rendered nugatory. Non production of any of the relevant records/documents file containing any reasons only strengthens the submission of the petitioner, which deserves to be accepted that the application of the petitioner was ignored by the competent authority. 15. There is yet another reason why the impugned action of the respondent cannot be sustained under the law. As already observed hereinabove, grant of mining lease is statutory power conferred on the authority, exercise of which, is regulated by the provisions contained in the Act of 1957 and the Rules of 1960 framed therein. 15. There is yet another reason why the impugned action of the respondent cannot be sustained under the law. As already observed hereinabove, grant of mining lease is statutory power conferred on the authority, exercise of which, is regulated by the provisions contained in the Act of 1957 and the Rules of 1960 framed therein. The manner, in which, the applications are required to be considered, is governed by the provisions contained in Rule 26 of the Rules of 1960 which provides in unequivocal terms that the State Government may, after giving opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant refuse to grant mining lease over the whole or part of the area applied for. The said provision is applicable both in respect of grant of mining lease as well as in the matter of renewal of mining lease. The statutory requirement contained in sub rule (1) of Rule 26 being relevant is extracted hereinbelow:- 26. Refusal of application for grant and renewal of mining lease.--(1) The State Government may, after giving an opportunity of being heard and for reasons to be recorded in writing and communicated to the applicant, refuse to grant or renew a mining lease over the whole of part of the area applied for. ---XXX--- ---xxx--- 16. The exercise of power to grant or reject is therefore, clearly circumscribed by the pre-condition that an opportunity of hearing is to be provided and further reasons are required to be recorded in writing and communicated to the applicant. The provision in essence, incorporates the principles of natural justice and fairness. The provision is intended to regulate the exercise of power and obviate whimsical and fanciful action in the matter of grant or renewal of mining lease. Incorporation of rule of natural justice as pre-condition for exercise of power has to be treated as mandatory. Moreover, the provision also imposes fetter by requiring authority to record reasons in writing and also communicated to the applicant as to why his application for grant of mining lease has been refused. Interesting argument has been raised by learned counsel for the respondents that the prescription with regard to grant of opportunity of being heard should be treated as directory in view of the word "may" prefixing "after giving opportunity of being heard". Interesting argument has been raised by learned counsel for the respondents that the prescription with regard to grant of opportunity of being heard should be treated as directory in view of the word "may" prefixing "after giving opportunity of being heard". Argument deserves to be rejected at the threshold because use of word "may" only controls exercise of discretion and does not make directory the requirement of affording an opportunity of hearing. Further, incorporation of rules of natural justice as precondition for exercise of power not only rests on principles of natural justice and fairness but also goes to jurisdiction of the authority. In such a case, order passed without affording opportunity of hearing, apart from being in violation of the principles of natural justice, it would also be in excess of jurisdiction. 17. The submission that the reasons for giving preferential treatment to the private respondent is so overwhelming that violation of principles of natural justice makes no difference as the result is foregone is merely an argument of disguise. There may be host of circumstances operating in the mind of the authority as to what would constitute reason to grant mining lease or reject application and they cannot be exhaustively enumerated for want of such provision in the statute itself. Whether all the circumstances of the case justify departure from normal rule of preferential treatment in favour of lessee, could be decided by the authority only after affording an opportunity of hearing to petitioner to satisfy the authority as to how he was entitled to grant of mining lease by maintaining the rule of preferential treatment and as to why respondent No. 4 could not be granted lease in departure from normal rule of preferential treatment. Admittedly, there was no lease subsisting in favour of the petitioner much less any provision of law or declared policy of the government brought to the notice of this Court that where any member of the family of applicant has been granted mining lease or applied for mining lease, no lease would be granted. Therefore, it was open for the petitioner to satisfy the authority and corresponding obligation on the competent authority to apply its mind after affording opportunity of hearing to the petitioner and recording any special reason in writing to justify departure from normal rule of preferential treatment. 18. Therefore, it was open for the petitioner to satisfy the authority and corresponding obligation on the competent authority to apply its mind after affording opportunity of hearing to the petitioner and recording any special reason in writing to justify departure from normal rule of preferential treatment. 18. Therefore, present is not a case falling in the category of exceptional case where despite violation of principles of natural justice due to foregone conclusion, no interference is warranted. 19. Respondent No. 4 has placed heavy reliance on the decision of the Supreme Court in the case of Indian Metals and Ferro Alloys Ltd. 1992 Supp. (1) SCC 91 (supra) to contend that even if application of respondent No. 4 was received at later point of time, the authority was fully justified in granting lease in relevant considerations, under which, respondent No. 4 emerged as more suitable for grant of lease. The said authority does not help the respondent No. 4. The decision of the Supreme Court is not an authority for the proposition that the rule of preferential treatment can be given a go by in violation of the mandatory provisions contained in sub-section (5) of Section 11 of the Act of 1957 or sub-rule (1) of Rule 26 of the Rules of 1960. The other decision i.e. Dharambir Singh (1996) 6 SCC 702 (supra) only advances the case of the petitioners and not of the respondents. In that case, the Supreme Court after examining the statutory scheme in Section 11 of the Act of 1957, observed thus:-- 4. Thus it would be seen that while granting a prospecting licence or mining lease, the area of discretion has been circumscribed by several factors enumerated in Section 11. In grant of mining lease of a property of the State, the State Government has a discretion to grant or refuse to grant any prospective licence or licence to any applicant. No applicant has a right, much less vested right, to the grant of mining lease for mining operations in any place within the State. But the State Government is required to exercise its discretion, subject to the requirements of the law. No applicant has a right, much less vested right, to the grant of mining lease for mining operations in any place within the State. But the State Government is required to exercise its discretion, subject to the requirements of the law. In the present case, the petitioner, no doubt has no vested right to be granted lease merely because he had applied earlier point of time, but for the reasons stated hereinabove, it has been found that while exercising discretion, the respondent authority has not complied with the requirements of law. 20. Reliance placed on the decision of M/s. Indian Charge Chrome Ltd. and another AIR 2002 Orissa 45 (supra) again does not help the petitioner. The principles of law which have been laid down in that case is that no one could have legal and fundamental right to claim mining lease in his favour excluding others and no hard and fast rule that prior application has always to be given preferential treatment can be laid down. Therefore, what has held is that discretion is available to grant lease in favour of one, who has applied at a later point of time. However, in the present case, this Court has found that exercise of such discretion has been abused by the official respondents in violation of the mandatory provisions contained in sub-section (5) of Section 11 of the Act of 1957 or sub-rule (1) of Rule 26 of the Rules of 1960. Therefore, action of the official respondents cannot be justified with the help of judgment cited. In the result, the impugned action of the official respondent in granting lease in favour of the respondent No. 4 in respect of the area applied for by the petitioner is declared illegal and void and inoperative in law. During the pendency of the petition, lease deed was executed in favour of respondent No. 4 on 14-01-2003 vide Annexure P-6 for a period of 20 years is declared void, illegal and inoperative in law. It is open for the respondents to consider the matter for grant of lease in respect of an area in dispute upon due consideration of the petitioner's application and the application of respondent No. 4 in accordance with law and the observations made by this Court. The petition is accordingly allowed. No order as to costs.